Foreigners can teach locals survival lessons

2010-01-23 13:27

SOUTH AFRICAN owners of spaza shops have a lot to learn from their

foreign counterparts.

Across the platinum belt and the City of Gold spazas are

increasingly being run by foreigners who have displaced local businesses.

They operate longer hours and keep a wider variety of goods

­compared to their counterparts in Vosloorus, Soweto and Rustenburg, the areas

we visited this week.

Rashid Ahmed, a small-business analyst at Finmark Trust, says

­foreign-owned businesses are booming partly because of their longer operating


“They can afford to work incredibly long hours because in most

cases they have left their families in their own countries,” says Ahmed.

He says another contributor to their success is that they organise

themselves into associations that ­focus on growing their businesses and saving

by buying in bulk. In contrast, local operators are unlikely to be members of an

organised group.

Some foreign shopkeepers even sleep in the storerooms of the shops

they run, like Jalaloddin Mohammad in Orlando East, Soweto.

“This shop is to me what women and beer are to other men,” says

­Mohammad, who has been working at the store for two-and-a-half years.

Mohammad says he only leaves the shop for a maximum of two days a

week. He has neither family nor friends in the country. He came to the country

through the shop’s Bangladeshi owner, who runs a chain of similar shops.

Our investigations in the East Rand, Soweto and Rustenburg

­indicate that many of the foreign ­nationals running the shops are ­employed by

groups of elusive and powerful foreign owners who typically have several


Information about the owners was scarce and requests for it ended

many interviews. The employees feared that their bosses would abandon them if

they discovered that they had spoken to the press.

These owners club together to buy goods from retailers at

favourable rates but they do not pass the savings from this practice onto their


On average they charge more than their local ­counterparts but remain

in business because they stock a wider ­variety of goods.

This is drawing a mixed response from their customers.

Mzoli Matiwane of Vosloorus says he prefers spending his money at a

store run by foreigners because he is guaranteed to find whatever he is looking


Elizabeth Ntlatseng of Orlando East does not mind shopping around

because of the higher prices.

“In most cases the prices at ­foreign-run spazas fluctuate,” says

Ntlatseng, adding that she only shops at these spazas for items she can’t find

at locals’ spazas.

A number of the foreign stores we visited may be operating below

the radar of the law and many employees did not have their identification

documents with them.

Home affairs spokesperson Cleo Mosana says the department does not

have statistics on the number of businesses operated by immigrants, including

those who are in the country illegally.

The SA Revenue Service (Sars) has an idea of the numbers of

foreign-owned small businesses that operate in the country legally but does not

record it for tax purposes.

“When a person registers a business we ask for their nationality

but we don’t record that information for tax-collection purposes.

“Many of these businesses are ­exempted from tax because they

generate profits of less than R100 000 a year,” says Sars spokesperson Adrian


What is clear though is that there is an increasing number of

foreign small-business owners chasing the African dream on our southern


“I am surprised to see that foreign entrepreneurs have even managed

to penetrate the most remote parts of the rural communities,” says Ahmed.

Difficult trading conditions have forced many local entrepreneurs

to rent their premises to foreign business people. One such entrepreneur is

Dumisane Nkosi of Vosloorus on the East Rand.

“I didn’t rent it out to a local ­entrepreneur because Bangladeshis

have a good reputation for paying their rent on time while South ­Africans

generally come up with ­excuses when it’s time to pay rent,” he says. “Besides,

I can charge them (Bangladeshis) whatever I want,” he says.

Nkosi charges his tenant R2 500 a month.

The emergence of foreign-owned small businesses in Vosloorus has

been a double-edged sword for ­him.

He has had to close his transport company that used to deliver

goods to other spaza owners in the township because the number of locally -owned

spaza shops dwindled and the foreign nationals use the services of one of their


In Phokeng, outside Rustenburg, many shops there are run by Somali

and Chinese nationals, who are not forthcoming about their business activities.

Not all of them operate ­legally.

Phokeng is home to the Royal ­Bafokeng Nation (RBN), which is said

to be among the richest communities on the continent because of their mining


RBN spokesperson Martin Bekker says they have worked with the

police to root out illegal businesses in the area over the past two years. He

says random inspections resulted in the closing of businesses that failed to

produce their business licences last year and in 2008.

“We are currently contesting four court applications for eviction

of such people at the Mmabatho High Court,” he says.

He says locals are responsible for the surging number of foreign


“The problem seems to lie with Bafokeng who obtain trading

­licences and then unlawfully sell or transfer these to foreign nationals in

under-the-counter deals,” he says.

The battle for survival is likely to intensify this year in the

townships and rural areas as job losses force families to choose more carefully

where they spend their money.

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